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In a challenging year for the restaurant industry, Denny’s Corporation (NASDAQ:DENN) stock has touched a 52-week low, dipping to $3.99. According to InvestingPro analysis, the stock appears undervalued at these levels, with multiple analysts maintaining price targets between $6.00 and $8.50. The family dining chain, known for its round-the-clock service and classic American diner fare, has seen its shares plummet as the company grapples with the economic headwinds that have buffeted the sector. Over the past year, Denny’s stock has experienced a precipitous drop, with a 1-year change showing a staggering decline of 54.87%. Despite these challenges, the company maintains a P/E ratio of 9.8 and generated revenue of $452.3 million in the last twelve months. InvestingPro data reveals the stock is in oversold territory, with management actively buying back shares - just two of the many insights available to subscribers analyzing this $206 million market cap restaurant chain.
In other recent news, Denny’s Corporation reported its fourth-quarter financial results, revealing a slight miss on profitability with adjusted earnings per share at $0.14, which fell short of the $0.15 consensus estimate. The company generated quarterly revenues of $114.7 million, missing the anticipated $116 million, partly due to the accelerated closure of underperforming franchisee-operated restaurants. Despite the revenue shortfall, Denny’s aligned its adjusted earnings before interest, taxes, depreciation, and amortization (AEBITDA) with expectations at $22.2 million. Benchmark analysts responded by lowering Denny’s stock price target to $8 from $10 but maintained a Buy rating, reflecting a positive long-term outlook on the stock. In addition to financial results, Denny’s announced a share buyback plan set to commence in 2025, following guidelines under Rule 10b5-1 of the Securities Exchange Act of 1934. The company also disclosed the upcoming retirement of Brenda Lauderback, Chair of the Board of Directors, effective May 14, 2025, prompting a search for her successor. As part of its strategic initiatives, Denny’s plans to close 150 underperforming units by the end of 2025 while expanding its Keke’s brand, aiming for up to 40 new restaurant openings and up to 90 closures in 2025. The company projects a cautious outlook for 2025, with anticipated same-restaurant sales ranging from -2.0% to 1.0%, influenced by macroeconomic factors.
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